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Rent subsidies available for Midtown residents

Ian Thibodeau
The Detroit News

Residents of Detroit’s Midtown who are in danger of being priced out of their apartments by rising rents could receive up to $4,500 over the next three years to help them stay put in the booming downtown Detroit neighborhood.

Stay Midtown — a partnership between Midtown Detroit Inc., Capitol Impact Partners, the Kresge Foundation and the Ford Foundation — targets Midtown households earning 51 percent to 80 percent of area median income that spend over 30 percent of their income on rent. The income range covers what the minds behind the program called “workforce” Detroiters in Midtown, a popular area of Detroit with about 98 percent occupancy in its apartments and homes.

Those approved will receive money to lower their monthly rent to no more than 30 percent of the total household income, which keeps rent from becoming too high a burden, according to Scott Sporte, chief lending officer at Capital Impact Partners, the company that compiled the data driving Stay Midtown.

Based on the parameters used for the program, someone making $23,450 a year, or 50 percent of the area median income, should pay no more than $586 a month for rent; someone making $37,520 a year shouldn’t pay more than $938 a month; and three-person household making $48,240 a year shouldn’t pay more than $1,206.

About $400,000 is available for the pilot phase. At most, an individual or family can receive $4,500 in assistance over a three-year period. Sport said he hopes around 350 households are assisted in the pilot phase.

Stay Midtown targets people who don’t already qualify for other affordable housing programs in the city, Sporte said.

The program is taking applications online through Applications can also be filled out and submitted to Midtown Detroit Inc. by mail, fax or hand delivered.

To qualify, applicants must not be students and have to have lived in Midtown for at least two years. Applicants must show proof that their rental rates have increased more than 10 percent from last year.

The boundaries defining Midtown for the purposes of the program are the Lodge to the west, I-94 to the north, the Chrysler Freeway to the east and the Fisher Freeway to the south.

Sue Mosey, president of Midtown Detroit Inc., said Stay Midtown will “help us retain an income diverse community with opportunities for individuals on the lower end of the pay scale, as Midtown is a convenient location due to proximity of employers, schools, transit options and neighborhood retail amenities.”

Mosey said the program bridges what could have become a gap between the workforce needed for major institutions in the area, and the cost of living.

“These jobs often allow room for advancement, so creating housing opportunities close to these employers will help provide not only housing stability but hopefully upward mobility for this segment of the workforce,” she said.

It’s a temporary crutch used to help workforce individuals and families over the next three to four years in Midtown, which Sporte and Bryan Hogle, program officer with Kresge, said will see rising rents due to maximum occupancy.

About 2,600 new apartments will open in Midtown in the next four years, increasing the supply to meet immense demand. When those new units become available, rents should level out, Hogle and Mosey said.

Sporte said the pre-emptive program can help Detroit’s greater downtown avoid problems caused by gentrification like those seen in the San Francisco Bay Area or New Orleans.

“As (New Orleans) rebuilt, they didn’t plan for the resurgence they had,” which rapidly forced a lot of people out of the neighborhoods they’d called home for so long, Sporte said. “It is not happening at that kind of pace in Detroit.”

Without intervention, the influx of new urbanites could result in the expulsion of longtime residents and families, he said. “It is a concern, but it’s not going to happen overnight.”

Organizers of the Stay Midtown program hope to take what they learn from the subsidized housing program and apply it through similar programs in other neighborhoods in the city. If successful, the program will be the basis for similar programs in six other Detroit neighborhoods, according to Sporte.

The Midtown plan comes as Dan Gilbert is working on a deal with the city downtown that would allow him to choose which of his residential projects would offer units reserved for people who can not afford the rising rents in greater downtown Detroit.

According to a proposed affordable housing agreement, those units are aimed at singles with annual incomes ranging from $28,140 to $56,280; and couples whose annual incomes could range from $32,160 to $64,320, according to income data provided by the city and Bedrock, slightly higher than those targeted by Stay Midtown.

“We’ve certainly heard concerns of development leading to displacement,” Hogle said. “This is in response to things we’ve been hearing from folks in the community.”

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Twitter: @Ian_Thibodeau